The West Texas Intermediate Crude Oil market rallied a bit Tuesday as we are now threatening to $104 level. This is an area that should cause a bit of resistance because there should be a certain amount of “market memory” in the area as there has been quite a bit of support at this previous trend line as well. Ultimately, this is a market that is going to have to make a significant decision over the next couple of days.
At this point, if we do break significantly above the trend line, it’s possible that we could go looking to reach the 50-Day EMA. The 50 Day EMA is at the $110 level, which is an area that would attract a lot of attention as well. It’s not until we break above there that the overall downtrend would be turned around, showing signs of massive momentum to the upside. In that scenario, the crude oil market could go looking to the $120 level. The $120 level is an area that has been significant resistance previously, and it does make for a significant target if we do break out to the upside.